How to use itRecord each payment with its receipt, keep a running balance, and reconcile the cash plus receipts to the fund amount before replenishing.
Who keeps itOne named petty cash custodian
WhenEvery time money leaves or returns to the box
Time neededAbout a minute per entry
Keep itIn the locked cash box, receipts clipped behind
Where the petty cash log fits
Petty cash is handy for small purchases, but without a log it is impossible to tell where it went.
Keep the fund small and assign one custodian.
13 items. Use it on screen, or print it and fill it in by hand.
Each payment
Reconciliation
Putting the petty cash log to work
Set a fund amount and a maximum per payment.
Assign one custodian.
Require receipts.
Reconcile before each top-up.
Review monthly.
A real-world example
A $300 fund has $42 in cash and $256 in receipts. The $2 difference is noted, and the fund is topped up by $258 after review.
What the petty cash log protects you from
Small cash payments are an easy place for losses to go unnoticed, so a log with receipts and an approver puts a second set of eyes on each one. The IRS expects business expenses to be backed by records of amount, date and purpose, and the log plus receipts provides that.
Filled-in sample
Date
March 6
Paid to
Corner hardware store
Purpose
Replacement mop head and bucket
Amount
$23.47
Receipt attached
Yes, receipt 14
Approved by
Ruth, office manager
Balance after payment
$126.53 of $150 fund
Sample for Little Acorns Daycare in Burlington, Vermont. The balance is written on every line so the box can be counted at any time, and the purpose names the item so the bookkeeper can code it to cleaning costs.
Where a petty cash log goes wrong
Handing out cash for a supply run with nothing in writing. Have the person sign an IOU slip for the amount, then swap it for the receipt and change when they return.
Paying a casual helper or a tip out of petty cash. Wages belong in payroll so taxes and records are handled, so keep the fund for small purchases only.
Topping up the box to the fund amount without adding up receipts first. Reconcile, sign the shortfall or overage, then write the replenishment check for exactly the receipts total.
Variations for different teams
Construction and field crewsWrite the job code on each receipt so small hardware runs end up in the right job cost.
Front offices and clinicsCap single payments low, such as $25, and route anything larger through a company card that leaves its own record.
Quick winNumber receipts in the order they come in and write the number on the log line. A gap in the sequence tells you right away that a slip is missing.
Questions about the petty cash log
How big should petty cash be?
Enough for a few weeks of small expenses.
Who can approve payments?
The custodian or a manager, per policy.
What if a receipt is missing?
Document it and get approval.
How often to reconcile?
At each top-up and at month end.
Can petty cash be used for an employee cash advance?
It is better not to, because an advance is a loan against wages and belongs in payroll with a signed agreement. Advances also leave IOUs where receipts should be, which makes the fund hard to reconcile.
How is petty cash recorded in the accounting books?
The fund is set up once as an asset, and each replenishment is booked by expense category from the receipts. That way stamps, cleaning supplies and parking land in the right accounts instead of one petty cash line.
Employees can fill in and sign forms like this in the EZTime app, and the signed copy lands in their digital employee file. A 14-day trial needs no credit card.
